The US SEC has been ramping up its efforts to protect ICO investors from those who might do them financial harm by creating a new cyber unit. This cyber unit looks like it’s rearing to do some damage, as it has just recently obtained an emergency asset freeze to stop a quickly moving initial coin offering fraud that has raised up to $15 million from an upwards of thousands of investors since last August.
How did this ICO attract that much capital so quickly? Well, according to a watchdog, they falsely promised to provide a 13-fold profit in less than a month!
The PlexCorps company said that the funds would be allocated toward employees and the furthering of the Plexcoin and the PlexCorp ecosystem.
Who is this culprit that was promising to provide about a 13-fold return in less than a month?
A recidivist Quebec securities law violator named, Dominic Lacroix, and his company called, PlexCorps.
The Commission filed their complaint in the federal court of Brooklyn, New York, stating that PlexCorps was in the process of selling and marketing their Plexcoin securities over the internet to investors in countries like the U.S and others, emphasizing that PlexCoin would provide an increase of 1,354 percent profit in less than a month.
This is a significant accomplishment for the SEC Cyber Unit because this would be first charges that are responsible for filing.
The Cyber division was created in September of this year for the sole purposes of dealing with cyber-related misconduct in the recently thriving distributed ledger space. The division will also be focused on other aspects of the space like initial coin offerings, fake news in regards to the legitimacy of their product, and company offerings, as well as hacking threats to exchanges.
Robert Cohen, the chief of the SEC cyber unit stated:
“This first Cyber Unit case hits all of the characteristics of a full-fledged cyber scam and is exactly the kind of misconduct the unit will be pursuing. We acted quickly to protect retail investors from this initial coin offering’s false promises.”
The SEC is seeking to obtain an emergency court order to seize the assets of the fraudulent company and the key people involved in the development and progression of it.
The SEC has been watching the industry for some time now and has stated that they will be getting involved if certain conditions were met. If so, they would step in and shut down fraudulent ICO’s.
Earlier this year, they then carried out their first action when they stopped Protostarr and told the company to give back the funding that they had raised through their ICO. Then, they took action with another ICO that was a fraud. Now, they’ve shut down or are in the process of shutting down this latest one.
So, beware fraudsters who seek to do financial harm to investors, beware.